Then there’s Google Apps, the suite of Web-based office applications that compete directly with Microsoft’s Office. More companies have embraced Google’s approach, and Microsoft earlier this year launched a competitive response called SkyDrive. All this made the end of the year seem a good time to check in with Amit Singh, a Google VP and head of its Enterprise unit. My first question was one I’ve asked repeatedly about Google Apps in one way or another for the last few years.

AllThingsD: So, was 2012 the year that Google Apps went mainstream in the Enterprise?

Singh: I’ll give you an update on customers and the product. This was the year where we broke the barrier and got large-scale customer adoption. There are others we haven’t announced, and you’ll be surprised by some of them. But Roche and BBVA — you wouldn’t consider pharma or banking customers to be early adopters. We also announced some large retailer customers, like Dillards, Kohl’s and Office Depot, and in the quarter before we announced them, we announced Costco. So these are big customers.

What’s making them cross the Rubicon and switch?

Its a combination of things. In this industry, once you see others going for it, you do it. However, there have been some confidence-building measures. People ask if you can deliver cloud applications at scale better than they can internally. The answer is yes. Is your security comparable to theirs? Yes. Can you comply with the regulatory environment they face? Last year, the answer was no. Now we’re able to do that at scale. It’s a combination of things. People are seeing others switch. We’re adding features. We’re building confidence. The more our customers get out there, the better people feel about it. People don’t listen to us. They listen to our customers. … Then we started Drive. Then we launched Google’s Cloud Platform, which was a big inititiative to open up our infrastructure for developers everywhere. The largest companies in the world are seeing what they can build using Google’s scale. And we launched the next generation of Chromebooks. Each of the things we’ve done, the investments we’ve made have given people reasons to take a serious look at us in a ways they might not have done before.

How do you view the competitive landscape now? Microsoft certainly responded with SkyDrive and a new version of Office. What threat do these represent to your plans?

Whether we like it or not, there’s massive change going on in the Enterprise. We started doing Gmail and Chat for your domain in 2005, when it really wasn’t very sexy. We extended and wrapped it with enterprise controls. We’ve since built up a lot of enterprise processes and support. Microsoft bought Yammer, and it’s a total consumerization type of play. Users adopt technology and then they bring it to the Enterprise, whether it’s welcome or not. A lot more things wil be built on things like Amazon Web Services, or hopefully more on Google, because it’s a lot faster and cheaper and better than what they can get internally from their own data centers. And that’s only going to accelerate. Regarding competitors, Microsoft has seen its market share decline somewhat. Enterprise is the place where they are holding on. People are showing up at the office and bringing their own devices and expecting their employers to support them. And with Windows RT, there is no backward compatibility with all the apps. That’s the first time that has happened in Windows. The Windows 8 move, they have done what they need to do, but it’s fairly disruptive. SkyDrive is coming. SharePoint needs to integrate with Yammer. So, change is coming whether you like it or not. We think we offer an alternative that is pure and proven.

What do you have that they don’t?

We used to compete on just cost. But that’s changed. On the cloud, over time you shouldn’t have to charge more money to get cloud services. Overall, your costs should go down. We’ve been at the $50 price point for apps for some time, while increasing the depth and breadth of our solution. On the other hand, the way they are incenting their customers to move is by charging them more. That is their strategy, and they are entitled to do what they want. Devices are going to proliferate, and Web services are now being delivered at scale. Then the question becomes whether you want to build around the desktop, or whether you want to build around Web services and devices being connected together. And, frankly, they don’t have the credibility to deliver Web services at scale. That’s just not what they do. They learn, hopefully, over time.

And yet you have to coexist with the desktop Office Client when the time comes, right? How is that now?

In the last year, if you look at the depth of where we’ve gone with Docs, both in the core features and in the desktop fidelity, we’ve made tremendous progress. Our goal is to get to the 90 percent of users who don’t need to have the most advanced features of Office. Sheets does tables graphing, etc., out of the box. In Q3, if you import from Excel into Sheets, you won’t be able to tell the difference in Sheets. We know the gaps between our features and theirs. We’re improving them week by week. We’re going to get to the the 90 percent. If you need the last 10 percent, you’ll want to use the desktop. The next thing is the import from PowerPoint to Slides. That’s where QuickOffice is going to help us a lot.

Talk a bit about the state of the ecosystem. We saw, for example, Backupify embracing a role as the backup for Google Apps users recently. I imagine there must be many secondary and ancillary services that operate within and around Google Apps. How is that evolving?

The way you look at a successful business is its ecosystem. For us at Google, it’s all about the ecosystem and developers. We have Android developers working on Enterprise applications now. The Android ecosystem for Enterprise is getting better, now that we’ve added things like encryption, and the same is happening on Chrome. On Apps, the top enterprise marketplace apps have all been acquired by larger companies. The top apps are getting a lof of distribution through Google. As Google Apps gets wider and stronger, the ecosystem is getting strong, as people want to extend its capabilitles. There’s Backupify; there’s Cloud Log for audits. There’s Smartsheet. We’re seeing the natural evolution, but you can expect us to spend more time cultivating that in the coming year. There’s also a strong ecosystem around implementation and support of Google Apps. We’ve gone from 3,000 partners to 6,000 in one year. So now there’s this massive distribution.

So what’s the big theme for 2013?

“Work the way you live.” Consumerization is here. It’s time to really embrace it. We’re doubling down on the Enterprise. It’s an increasingly important part of Google, and a place where we plan to invest and to support our customers.

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